Onto Innovation and Robinhood: investment ideas from Freedom Broker experts

Freedom Broker analysts maintained their “Buy” recommendation for shares of Onto Innovation (ONTO) and Robinhood Markets (HOOD). The companies are expected to see price appreciation amid strong earnings, the expansion of new business lines, and an improving technical setup. For Onto Innovation, the target price is $360 versus the current price of $308.3, implying upside potential of about 16.8%. For Robinhood, the target price was set at $112.5 versus $93.2 currently, or about 20.7% upside.

Onto Innovation: record results confirm demand from AI infrastructure

Onto Innovation is a U.S. developer of equipment and software for semiconductor manufacturing process control. The company produces defect inspection systems, optical metrology, 3D inspection, and manufacturing analytics solutions used in the production of advanced chips, including solutions for artificial intelligence and high-bandwidth memory HBM.

Analysts cite confirmation of strong demand for the company’s equipment as the key argument in favor of the stock. In Q2, Onto Innovation posted record revenue of $343.1 mln—up 35.3% year over year and nearly 18% above the prior quarter. The result exceeded the верхняя граница previously announced company guidance.

Onto Innovation profit is growing faster than revenue

Financial results also point to stronger operating leverage. Operating profit in Q2 rose nearly twofold, to $63.6 mln versus $32.2 mln a year earlier. Net profit increased from $33.9 mln to $60.1 mln, while diluted EPS rose from $0.69 to $1.21.By non-GAAP, EPS reached $1.93 versus $1.25 a year earlier. Adjusted operating margin increased from 25.9% to 30%.

Analysts also view the Q3 outlook as an additional signal supporting further growth. Onto Innovation expects revenue in the range of $380–400 mln and adjusted EPS of $2.18–2.38. Thus, the company expects to continue accelerating after a record Q2.

HBM4 and chip packaging support the outlook

One of the key drivers for Onto Innovation remains HBM4 memory production and advanced chip packaging. The company began shipments of Dragonfly G5 wafer inspection systems to a major memory maker that selected Onto equipment after comparative testing.

Additional demand is being generated by manufacturers of multi-die chips for AI infrastructure. According to analysts, confirmation of further Dragonfly G5 orders could become an additional catalyst for revising 2026–2027 revenue and earnings forecasts. The company also has a sizable cash cushion: as of the end of Q2, cash and short-term investments totaled $1.88 bln.

Robinhood: business growth is moving beyond trading

Robinhood Markets (HOOD) is a U.S. fintech platform for retail investors offering trading in stocks, options, and cryptocurrencies, as well as Robinhood Gold subscriptions, lending products, asset management, and access to the private-company market.

Freedom Broker analysts see the company’s key advantage as its ability to simultaneously expand existing revenue streams and create new ones. Q2 results confirm this: Robinhood revenue grew 32% year over year and reached a record $1.31 bln, while net profit rose 48% to $573 mln. Diluted EPS came in at $0.62 versus $0.42 a year earlier. Adjusted EBITDA increased 35% to $741 mln.

New business lines are becoming independent growth drivers

Robinhood’s growth is no longer limited to traditional trading: transaction-based revenue in Q2 increased 44% to $776 mln. Options revenue rose 29% to $342 mln, and equity trading revenue surged 95% to $129 mln.

The event-outcomes contracts segment is developing especially quickly. Its revenue exceeded $156 mln and increased more than 10-fold year over year. Trading volume in such contracts reached a record 13.6 bln.

Analysts specifically highlight the launch of Rothera —a regulated exchange and clearing platform that Robinhood is developing together with U.S. technology company Susquehanna International Group. The platform allows users to trade contracts on the outcomes of real-world events and is rapidly gaining popularity and trading volume. Shifting part of activity to its own infrastructure could potentially allow the company to generate additional exchange and clearing revenue and improve segment margins.

Robinhood continues to expand its client base

The number of funded customers in Q2 reached 28.4 mln, up 7% year over year. The number of investment accounts grew 9% to 29.9 mln, while platform assets rose 32% to $369 bln.

The Robinhood Gold subscription trend is particularly notable: the number of subscribers increased 39% to a record 4.8 mln. Net deposits for the quarter totaled $21.7 bln, and for the last 12 months—$75.7 bln.

The technical reversal still requires confirmation

After pulling back from July highs near $118, HOOD shares found support around $84–86 and rebounded to $93.2. The stock is still below the 50-day and 200-day moving averages—about $97.7 and $98.7, respectively. Therefore, the $98–100 area remains key resistance. A sustained move above $100 could confirm an improvement in the medium-term trend.

This is not an individual investment recommendation.